As initial demand for the iPhone 7 has the market buzzing, top analysts are incited to weigh in with bullish forecasts on Apple Inc. (NASDAQ:AAPL) and QUALCOMM, Inc. (NASDAQ:QCOM), respectively. Let’s take a closer look:
Piper Jaffray top analyst Gene Munster conducted a survey with Piper Jaffray analyst Peter Keith to poll 403 U.S. iPhone owners regarding their intent to buy the tech titan’s newest upgrade to the 7/7 Plus ahead of the launch.
Even though the survey’s results reveal owner interest in fact diminished once the announcement was made that the new iPhone 7 was on its way, Munster remains positive. Not allowing the data to deter the analyst from a predominantly upbeat perspective, Munster reiterates an Overweight rating on shares of AAPL with a $151 price target, which represents a nearly 33% increase from where the stock is currently trading.
Munster asserts, “We believe bigger picture it raises a question about the tail of iPhone 7 demand into March and June, which were strong quarters for the iPhone 6 but not the 6S. We believe it is early to determine the tail and plan on revisiting the survey in November and early next year. We remain confident in our thinking for flattish growth for iPhone 7 vs iPhone 6 and reiterate our Overweight rating.”
Though there might be evidence of upgrade interest decline, the analyst does see an “interesting” flipside, noting that the “iPhone 7 Plus appears to have more upgrade appeal.” Munster’s survey data indicates that “the biggest increased cohort of iPhone owners that plan to upgrade was iPhone 6 Plus owners,” which from Munster’s perspective underscores the value of the advanced camera technology featured in the iPhone 7 Plus as a catalyst for AAPL.
As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Gene Munster has achieved a high ranking of #5 out of 4,166 analysts. Munster upholds a 67% success rate and realizes 18.6% in his annual returns. When recommending AAPL, Munster earns 13.2% in average profits on the stock.
TipRanks analytics exhibit AAPL as a Strong Buy. Based on 36 analysts polled in the last 3 months, 31 rate a Buy on AAPL, 4 maintain a Hold, while 1 issues a Sell. The 12-month average price target stands at $126.86, marking a nearly 12% upside from where the shares last closed.
Canaccord top analyst Michael Walkley also is out with a research report, assessing QCOM in the context of the iPhone 7 market share. Walkley believes the chip maker has “maintained over 50% of the new iPhone 7 modems,” and notes maintained shares continue “in regions requiring more complex modems including China and Japan.” Additionally, the analyst recognizes gained shares amid mid to high-end Android smartphones.
On back of the iPhone 7 release, which takes into account three SKUs on a global level, Walkley commends QCOM for retaining baseband share in two of the three SKUs, an approximate 56% of global unit share according to the analyst’s 2017 iPhone sales projections.
As such, Walkley reiterates a Buy rating on QCOM with a price target of $70, which represents an 11% increase from where the shares last closed. Additionally, the analyst boosts his non-GAAP EPS forecast for the fiscal year of 2016 from $4.26 to $4.35, a reflection of expected catch-up payment timing for recent deals with OPPO and Vivo. However, Walkley maintains his projection for the fiscal year of 2017 at $4.99.
“We believe Qualcomm’s strong roadmap is driving improving Android share and margins, particularly with the Snapdragon 600 and 400 families. We believe these trends will continue as leading Chinese OEMs continue to consolidate market share and utilize more of Qualcomm’s higher-end solutions versus the competition as these OEMs expand into international markets. Overall, our longer-term positive thesis remains intact, as we believe QCT is gaining higher-end Android market share and QTL is returning to growth with stronger collections and new growth from adjacent market opportunities,” Walkley concludes.
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star analyst Michael Walkley has achieved a high ranking of #26 out of 4,166 analysts. Walkley upholds a 61% success rate and yields 14.7% in his yearly returns. When recommending QCOM, Walkley gains 5.2% in average profits on the stock.
TipRanks analytics demonstrate QCOM as a Buy. Based on 18 analysts polled in the last 3 months, 9 rate a Buy on QCOM, 8 maintain a Hold, while 1 issues a Sell. The consensus price target stands at $62.54, marking a nearly 1% downside from where the stock is currently trading.